cost and benefits on alternative sources of finance

Home Forums Ask ACCA Tutor Forums Ask the Tutor ACCA P4 Exams cost and benefits on alternative sources of finance

This topic contains 2 replies, has 3 voices, and was last updated by Avatar of johnmoffat John Moffat 3 years, 4 months ago. This post has been viewed 88 times

Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts

  • avatar
    koolliver
    Participant
    • Topics: 9
    • Replies: 18

    Question 1 :
    what are the cost and benefits on alternative sources of finance available within :
    A. international equity
    B. Bond markets
    C. Securitisation
    D. collateralisation

    kindly explain it in detail.
    Question 2: what is mezzanine debt ??


    avatar
    csandi
    Participant
    • Topics: 2
    • Replies: 5

    Question 2 …found this on the net…

    “Mezzanine debt is a type of borrowing by a public company in which the lender has a particularly low claim on the company’s assets in the event that it goes into liquidation before the debt is settled. In this situation, the lender’s claim will be of a lower priority to all other creditors except for holders of common stock. As a result, this type of debt tends to carry higher costs for the lender than other types of borrowing.”


    Avatar of johnmoffat
    John Moffat
    Keymaster
    • Topics: 3
    • Replies: 3749

    csandi’s definition is correct.

    Mezzanine debt is unsecured borrowing. It is called mezzanine because if a company winds up, secured debt is paid off first, then any unsecured debt, and then (if there is anything left) equity.

Viewing 3 posts - 1 through 3 (of 3 total)

You must be logged in to reply to this topic.